Earlier this week
Rookie Chariman of the Federal Reserve, Ben Bernanke,slashed federal interest
rates one half-point, and there was much rejoicing throughout the land.
Not to be outdone, retired Fed honcho Alan Greenspan embarked on an emergency
book tour and, when asked his opinion of the bold and unexpected move,
responded, “Whatever.”

By the time the
point-cutting frenzy had subsided, the DOW was up 336 points, the largest
single-day rise in nearly five years; the S&P 500, which, unlike the DOW,
mixes letters and numerals with an ampersand, rose 43 points, or nearly 3%; and
the Nasdaq also climbed nearly 3% with a 70-point surge. Meanwhile, the
Philadelphia Eagles failed to cover the spread.

In addition to its
impact on financial markets, tech stocks, utilities and Vegas sports books,
this first federal rate cut in nearly four years will, according to Business
Week, “allow business owners to pay themselves a bigger salary when they may
have been scrimping.” Huzzah! And if you’re not a business-owner,
short-seller, or hedge-funder, what does this mean to you? Only that the
already piddling interest you’re earning on that passbook savings account just
got piddlier.

On the bright side,
where the glare can be blinding to the financially impaired, the rate cut is
also expected to “restore consumer confidence” and therefore "spur more
borrowing" -- an oddly celebratory note, considering over-extended
borrowing is what necessitated the rate-slashing brouhaha in the first place.

But with the euphoric
rush of predatory lending practices dissipated in the gentle afterglow of a
federal rate cut, most banks and mortgage lenders have come to their senses and
decided once again to lend money only to people who don’t really need
it. Placing the blame squarely where it belongs, on the backs of
low-income borrowers who bought their snappy sales patter and fancy adjustable
math, Countrywide Financial Corporation, the largest mortgage lender in the
U.S., has proudly announced it is now out of the subprime mortgage
business.

And who could blame
them? Lending money to poor credit risks is simply a bad idea.

Unless that poor risk
is Countrywide Financial Corporation, whose subprime lending practices led to
its highest foreclosure rates in five years, forced thousands of layoffs,
triggered a run on the bank not seen since Bedford Falls, and dumped their
stock in the toilet like a used goldfish. So dire were the straits jacketing
CFC, they contributed to and worsened a "global liquidity crisis,” to use
the doomsday phrase breathlessly repeated by our hyper-ventilating media in
recent weeks. So, top hat in hand, CFC went begging to the commercial
paper and secondary mortgage markets -- without success -- before eventually
panhandling more than $20 billion in financing from other banks, and a $2
billion equity investment from Bank of America.

Now fat with borrowed
money they won’t be lending any time soon to those who might need it,
Countrywide CEO Angelo Mozilo is feeling “very
bullish” on the future. And why shouldn’t he? The flush and
well-tanned Mozilo ranks #7 on the most recent Forbes 400 list with
$142 million in annual “total compensation.” Although it should be noted
that after stockholder outcry over his enormous 2005 compensation, Mozilo did
the responsible CEO thing and took a $1 million dollar pay cut. What a
mensch!

So if your “consumer
confidence” is soaring over this zippy federal rate cut, put your money where
the big boys have: open a savings account with CFC, currently paying
a whopping ONE-HALF PERCENT -- the same as the federal
rate cut! It's kismet!

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